Disposable Diaper 1 
BARRIERS TO ENTRY
Union carbide:
- Presence only in industrial and consumer chemicals
- Development of mind share in the consumer’s mind would be difficult due to low presence in consumer products - Marketing advantages of other players
- New distribution channels would have to be developed: significant costs involved in terms of trade discounts
- Economies of scale for incumbents
- Presence of existing plants as well as announcement of new plants
- Presence in other consumer products helps incumbents reduce transportation costs (products are shipped together by P&G)
- Learning curve involved in the production process – which will take time to achieve higher efficiencies of production
- Late entry will provide lesser time to learn and adapt to changes
BARRIERS TO ENTRY
• Johnson &Johnson
• Lack economies of scale:
• Limited regional presence resulting in higher transportation costs
• Difficulty in manufacturing at high efficiencies
• Patent action by P&G
• Learning curve involved in the production process which will take time to achieve higher efficiencies of production
WAY AHEAD FOR CARBIDE
P&G BEST DEFENSE AGAINST
ENTRY
• Deterred Entry for other firms:
• P&G can keep other companies out by employing entry-deterring strategy
• Employing the entry deterring strategy can boost P&G’s market share
(profits)
Control of essential
Economies of scale &
Marketing Advantages resources Scope
• Estimated 50% of the raw material cost is of Fluff pulp- P&G’s division supplies in the open market
• Increase the price of the raw material in the open market to create structural barrier to entry
• P&G enjoys the benefit of economies of scale ($5.56mil/machine). Also, reaping the benefit of full carload and trainload shipment. Prices is much more as compared to competitors. Higher margin. They can afford to engage in a price war.
• P&G can leverage the advantage of a more wide-spread distribution channel by spending much less per dollar of sales than their immediate
Union carbide:
- Presence only in industrial and consumer chemicals
- Development of mind share in the consumer’s mind would be difficult due to low presence in consumer products - Marketing advantages of other players
- New distribution channels would have to be developed: significant costs involved in terms of trade discounts
- Economies of scale for incumbents
- Presence of existing plants as well as announcement of new plants
- Presence in other consumer products helps incumbents reduce transportation costs (products are shipped together by P&G)
- Learning curve involved in the production process – which will take time to achieve higher efficiencies of production
- Late entry will provide lesser time to learn and adapt to changes
BARRIERS TO ENTRY
• Johnson &Johnson
• Lack economies of scale:
• Limited regional presence resulting in higher transportation costs
• Difficulty in manufacturing at high efficiencies
• Patent action by P&G
• Learning curve involved in the production process which will take time to achieve higher efficiencies of production
WAY AHEAD FOR CARBIDE
P&G BEST DEFENSE AGAINST
ENTRY
• Deterred Entry for other firms:
• P&G can keep other companies out by employing entry-deterring strategy
• Employing the entry deterring strategy can boost P&G’s market share
(profits)
Control of essential
Economies of scale &
Marketing Advantages resources Scope
• Estimated 50% of the raw material cost is of Fluff pulp- P&G’s division supplies in the open market
• Increase the price of the raw material in the open market to create structural barrier to entry
• P&G enjoys the benefit of economies of scale ($5.56mil/machine). Also, reaping the benefit of full carload and trainload shipment. Prices is much more as compared to competitors. Higher margin. They can afford to engage in a price war.
• P&G can leverage the advantage of a more wide-spread distribution channel by spending much less per dollar of sales than their immediate